Russia Stocks Climb as China Boosts Crude; Rosneft Advances

Russian stocks rose, erasing this week’s declines, as China’s accelerating economy boosted commodities.

The benchmark Micex Index (INDEXCF) traded up 0.4 percent at 1,518.27 by 2:17 p.m. in Moscow, headed for a 0.3 percent gain in the week. OAO Rosneft, the nation’s biggest oil producer, climbed 0.9 percent to 259.29 rubles. OAO Sberbank, the country’s largest lender, added 1.1 percent to 104.55 rubles.

Crude, Russia’s main export earner, increased 0.7 percent in New York. China’s economy expanded 7.8 percent in the third quarter, government data showed today, matching the median estimate in a Bloomberg News survey of economists and halting a two-quarter slowdown. The Micex has advanced 3.8 percent this month on optimism a U.S. debt-ceiling deal would be struck.

“The oil price is the main thing for Russia,” Victor Bark, who oversees about $2.8 billion as the head of asset management at Alfa Capital in Moscow, said by phone. “the dependency of our economy on oil is only growing.”

Russia-dedicated equity funds saw $52 million in outflows in the week ended Oct. 16 compared with inflows of $4 million the week earlier, UralSib Capital said in an e-mailed note, citing EPFR Global data.

Hollywood Ending

President Barack Obama signed into law a measure ending the 16-day government shutdown and extending the nation’s borrowing authority until early next year.

“We saw a real Hollywood ending, everyone was happy,” Bark said, referring to the U.S. deal. “Ninety percent of the market had expected the government to find a resolution.”

Rosneft increased 1.1 percent to $8.11 in London, while Sberbank added 1.3 percent to $13.12.

Most metals gained in London, including nickel and tin. Standard & Poor’s GSCI Index climbed 0.4 percent. OAO Magnitogorsk Iron & Steel jumped 1 percent to 8.321 rubles in Moscow, rising 0.9 percent to $3.38 in London. OAO Novolipetsk Steel increased 1.1 percent to 56.89 rubles and rose 1.3 percent to $17.93 in London.

The RTS Index (RTSI$) gained 0.8 percent to 1,502.98. The dollar-denominated gauge rose 20 percent from this year’s low to enter a bull market on Oct. 10.

Polymetal International Plc, the Russian gold and silver miner part-owned by billionaire Alexander Nesis, jumped 6.2 percent to 306.77 rubles, the biggest advance on the Micex. Polymetal was raised to neutral at Bank of America Merrill Lynch today. The company said yesterday third-quarter gold output rose 30 percent on progress at its Amursk pressure oxidation plant.

Russian equities have the cheapest valuations among 21 emerging economies monitored by Bloomberg, with shares on the index trading at 4.5 times projected 12-month earnings, compared with a multiple of 10.8 for the MSCI Emerging Markets Index. Ten-day price swings on the Micex rose to 15.179 from 15.169 yesterday.

To contact the reporter on this story: Ksenia Galouchko in Moscow at kgalouchko1@bloomberg.net

To contact the editor responsible for this story: Wojciech Moskwa at wmoskwa@bloomberg.net

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